TMI Blog1985 (4) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... l part of the waste thrown away by Gwalior Rayon Factory. The slurry waste was not sold to Jameco Agencies. 2. No contradiction was made to the above story in the Collector s order, which records that the assessee wrote to the Superintendent of Central Excise, Nagda in March 1979 that neutralization of hydrochloric acid was a regular feature. The Collector ended his order (No. 2/80 T.I. 14G dated 28-7-1981) by saying that neutralized hydrochloric acid in the form of slurry constituted goods on which duty should have been paid when supplied to a customer. 3. The learned counsel for the factory told us at the Bench that the goods was of no use to them. They had to treat the hydrochloric acid because it was a substance that cannot be thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawing this slurry into excisability. It may not have come to market but marketability was not a necessary qualification, according to the South Bihar Mill decision of the Supreme Court 1978 E.L.T. J 336. The 1980 E.L.T. 146 decision on Indian Aluminium was about dross and skimmings, rubbish and scum. This neutralised slurry was not such a commodity. The judgments quoted by the appellants are totally irrelevant. 5. The counsel for M/s. Gwalior Rayon returned to say that slurry was not a name, much less a new name. The Supreme Court said the goods must be ordinarily sold; the expert said the waste was not marketable. The Government has not discharged its burden of proving the goods are dutiable. 6. The Collector s order says- I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zing the hydrochloric acid, a distinct commodity assessable to central excise duty, without permission. In para 4.5, the order affirms that neutralization was done with the full knowledge of the central excise officers. 8. Can we then say that the neutralization was for producing a new commodity? We do not think so. It was for destroying a commodity, hydrochloric acid. And we do not see how the factory would have neutralized hydrochloric acid to produce a new commodity for so long and the central excise do nothing about it. They should have stopped it, or better still, clamped down central excise control, supervision etc. etc. to ensure that duty was paid at the right time. But the Department evidently accepted that it was not a producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and so forth, but no. They said it was neutralised hydrochloric acid; they do not refute the factory s claim that it was a destruction. The Collector very fairly accepts (para 4.4) there was no wilfulness about the neutralization, meaning thereby, that the neutralization was not a cover for something, but that it was a straightforward operation and that it was what it said it was, and that it did not lead to any unlawful act. The slurry/effluent/neutralized acid, therefore, was not a goods created for profit, or capable of bringing profit. 10. This is not invalidated by the fact that the waste suddenly found a use one day. Many wastes, even human wastes, can and do find uses. Many cities have schemes of treating sewage to obtain gas, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven if such a despatch by pipeline was by power. When the slum was despatched, it was already finished slurry and the despatch did not make it more slurry or more waste. The dispatch by using power is not .manufacture of the slurry by the use of power. We accordingly direct him to extend the exemption under the notification which he unjustly denied. 14. We direct all concerned, the central excise authorities and M/s. Gwalior Rayon Co. to proceed and to act in accordance with the judgment we have given above. [Order per : G. Sankaran, Member (T)]. - I agree with brother Syiem that the neutralization of hydrochloric acid in the present case resulting in slurry did not amount to manufacture and that the slurry would not attract duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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